Short squeezes have been among the most popular and controversial topics on Wall Street in the past couple of years. In 2021, groups of online stock traders on Reddit made headlines by orchestrating targeted buying campaigns to trigger short squeezes in some of the market’s most heavily shorted stocks.
A short squeeze is a large, short-term spike in a stock’s share price that occurs when a significant number of short sellers are forced to buy shares and exit their positions all at once.
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Here are nine stocks primed for the next big short squeezes, according to Ortex Analytics:
| Stock | Short interest as of Aug. 1 |
Cost to borrow* |
| Sirius XM Holdings Inc. (ticker: SIRI) | 29.2% | 28.4% |
| Quince Therapeutics Inc. (QNCX) | 15.3% | 31% |
| AMC Entertainment Holdings Inc. (AMC) | 29.8% | 244.2% |
| Hyzon Motors Inc. (HYZN) | 16.3% | 68.4% |
| Cricut Inc. (CRCT) | 24.7% | 18.6% |
| Amyris Inc. (AMRS) | 22.5% | 19.2% |
| Prime Medicine Inc. (PRME) | 22.2% | 17.4% |
| Shift Technologies Inc. (SFT) | 16.1% | 40.8% |
| AirSculpt Technologies Inc. (AIRS) | 21.5% | 17.8% |
| *A high borrowing cost is an indicator of high short-seller demand. |
Sirius XM Holdings Inc. (SIRI)
Sirius XM Holdings is a leading provider of satellite and internet radio services, largely to the auto industry. On Aug. 1, Sirius XM reported second-quarter earnings and revenue numbers that beat consensus analyst expectations after a first-quarter miss. The company also guided for just $1.15 billion in 2023 free cash flow, a potential year-over-year decline of about 25%. Sirius XM is on track for its third consecutive year of declining cash flows, and short sellers are taking notice. However, a recovery in the global auto market could be enough to trigger a major short squeeze. Sirius XM’s short interest is 29% of its float, or free-trading shares.
Quince Therapeutics Inc. (QNCX)
Quince Therapeutics is a biotechnology company that acquires, develops and commercializes therapeutics, including its precision bone growth molecule, NOV004. The treatment targets and concentrates at bone fracture sites. Quince shares ripped higher in March when the company received an acquisition offer from Echo Lake Capital at a price of $1.60 per share, but the Quince board rejected the offer in April. Echo Lake raised its offer to $1.80 on July 13. Quince then announced its own planned acquisition of private biotech company EryDel SpA on July 24. Short sellers seem to think Quince shouldn’t have rejected the buyout. Ortex estimates 15% of Quince’s float is held in short positions.
AMC Entertainment Holdings Inc. (AMC)
Struggling movie theater operator AMC Entertainment was one of the original short squeeze stocks that got Wall Street’s attention back in 2021. With the company teetering on the brink of bankruptcy, AMC’s stock price soared from less than $2 to as high as $72.62 in less than six months in early 2021. In 2023, AMC’s business is still floundering, reporting a $235 million net loss in the first quarter. However, the stock recently demonstrated its major short squeeze potential, surging 35% after a court ruled against the company’s preferred share conversion plan. AMC’s short interest is up to 30% of its float.
Hyzon Motors Inc. (HYZN)
Hyzon Motors is a hydrogen mobility company focused on designing, developing and producing stand-alone and integrated hydrogen fuel cells and systems, as well as hydrogen-powered commercial vehicles. Hyzon went public via a special-purpose acquisition company, or SPAC, merger in July 2021 at a price of $9.70, but it has since dropped about 80%. In June, Hyzon said it has strengthened its governance and identified “material weaknesses in controls and procedures.” The company previously delayed its first-quarter earnings report and disclosed a delisting warning from the Nasdaq. Meanwhile, the stock’s short interest is up to 16% of its float.
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Cricut Inc. (CRCT)
Cricut makes smart machines used for crafting and do-it-yourself projects. The company priced its May 2021 IPO at $20 per share, and the stock has since lost nearly 40% of its value. In May, Cricut announced impressive 19% total user growth and 17% paid subscriber growth in the first quarter. However, short sellers likely focused more on the company’s 26% drop in revenue. Still, Cricut has now reported six consecutive profitable years. The stock gained 130% in a month after declaring a special dividend in late May, demonstrating its squeeze potential. Ortex estimates about 25% of the company’s float is currently held in short positions.
Amyris Inc. (AMRS)
Amyris produces sustainable ingredients used in consumer products. The company has generated impressive growth numbers, but short sellers have taken note of its expanding losses. In May, Amyris shares dropped to a new all-time low of 55 cents, making the stock at risk of being delisted from the Nasdaq. In June, the company’s CEO resigned and Amyris announced a “reduction in force” as part of its goal of cutting costs by $250 million. A surprise profit at some point could trigger a massive short squeeze. Amyris’ short interest has grown to 22.5% of its float.
Prime Medicine Inc. (PRME)
Prime Medicine is one of the few companies that went public in a difficult market in 2022. Prime Medicine is developing its gene-editing technology, Prime Editing, to treat a wide range of genetic diseases. So far in 2023, Prime has nominated PM359 as its first development candidate for treating chronic granulomatous disease, or CGD. It has also reported data demonstrating the potential of its PASSIGE technology to produce CAR-T cells, suggesting Prime Editing could potentially be used to treat some cancers and immune diseases. Short sellers are seemingly skeptical about the company’s technology. Prime Medicine’s short interest is about 22% of its float.
Shift Technologies Inc. (SFT)
Online used car retailer Shift Technologies went public via a SPAC merger in October 2020. Roughly seven months later, it was back raising money yet again, selling $75 million worth of convertible notes in May 2021. In August 2022, the company announced a merger with CarLotz, a new CEO and a new business plan that will make the company profitable by 2024. In July, Shift announced plans to lay off 34% of its workforce as part of a “restructuring to streamline operations.” Short sellers are seemingly skeptical of the company’s plan. Ortex estimates 16% of Shift’s float is held in short positions.
AirSculpt Technologies Inc. (AIRS)
AirSculpt Technologies offers treatments that use a minimally invasive procedure to remove fat, tighten skin and reshape targeted areas of the body. AirSculpt went public in October 2021 at an IPO price of $11 per share, and the stock remains below that price. In July, AirSculpt reported preliminary second-quarter revenue of $55.7 million, up 12.2% from the year before. The company also reiterated full-year revenue guidance of $187 million. The stock is up 146.5% year to date through Aug. 1, but short sellers aren’t buying the rally. AirSculpt’s short interest is 21% of its float.
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9 Short Squeeze Stocks That Could Take Off in August originally appeared on usnews.com
Update 08/02/23: This story was previously published at an earlier date and has been updated with new information.
